Infrastructure availability and disruption levels on performance of firms: a survey of Sub-Saharan Africa informal enterprises

Infrastructure deficiency and supply disruption challenges are quite common among developing economies. While Sub-Saharan Africa is not unique to these challenges, it is the extent of levels of infrastructure deficiency and disruptions that affect the level of performance of small businesses. Literature on the performance of small businesses suggests both infrastructure availability and disruptions affect the performance of small businesses, but the effects on informal enterprises that operate from locations where the supply of infrastructure is weak are less documented. The paper, therefore, investigates the effects of four types of infrastructure supply in two dimensions of availability and disruption levels on the performance of informal enterprises in 12 Sub-Saharan African countries.

The study uses data from World Bank informal enterprises surveys based on a sample of 3 735 informal enterprises. The study uses the multiple analysis of variance method based on the World Bank's Informal Enterprise Surveys (IFS) country-level cross-sectional data collected between 2009 and 2019.

Results show infrastructure supply is quite low irrespective of the form of infrastructure. Infrastructure availability is associated with high supply disruptions. Infrastructure supply deficiency and disruption intensities are negatively associated with informal enterprises' performance. Finally, the effects of both infrastructure availability and supply disruptions are positively associated with informal enterprises' business activity levels.

Due to data limitations, only four types of infrastructure are captured in the analysis. A wider variety of types of infrastructure could improve the analysis.

Given the deficiency level of infrastructure and its implications on informal enterprise development, therefore, policy interventions aiming at addressing informal enterprises' challenges should focus on improving infrastructure supply deficiencies and disruption challenges. This paper provides the link between infrastructure levels, infrastructure supply disruptions and performance of the informal enterprises which is an essential starting point for policy intervention in informal enterprise development.